Today, I sold 65 shares of PZZI at $6.77/share, my entire holding.
This will be a short article because of one fundamental reason: I have no idea why I bought PZZI. As best as I can remember, I read a SeekingAlpha article on Pie Five, PZZI’s successful make-your-own-pizza restaurant concept. That sounded pretty interesting to me. I had some money left over in a secondary brokerage account, which wasn’t worth the hassle of transferring elsewhere. So I figured “Why not?” and bought my position.
Honestly, I kind of forgot about it after that. I didn’t keep track of it much, and never really considered it part of my portfolio. I didn’t have an investment thesis when I bought, which is a pretty serious mistake. If I wanted restaurant exposure, there were a lot of great dividend growth stocks in the restaurant industry I could have bought instead, like McDonald’s (MCD), Cracker Barrel (CBRL), and Yum! Brands (YUM). There was no liquidity in the stock, and more importantly, there was no dividend. So PZZI didn’t fit in my portfolio at all.
The first time I noticed I had a decent gain (~25%) on PZZI, I decided to sell. Although my gain shrank quite a bit by the time I got around to it (yes, it took a while), I still walked away with a net gain (~4.5%), which is cool.
Oh well, this was an odd little gamble, and I’m glad it turned out all right. No harm no foul. At least with my investment plan in place, this won’t be happening again!
This was my only position in my growth portfolio as well, so that is now empty. Since PZZI didn’t pay a dividend, my annual dividend income is unaffected.
Disclosure: Long MCD, YUM.
Image source is available here.
12 Comments
I’ve never heard of PZZI. The company logo is pretty cool though. It’s good that you were able to walk away with a small profit. The financials for the company differently doesn’t resemble those of quality dividend stocks.
Henry – Living At Home recently posted…Recent Sale – The ADT Corporation (ADT)
Yeah, I got lucky. A lot of my other gambles didn’t go so well! I definitely agree with the financials being subpar; the FAST Graph for PZZI is terrible! Definitely not going to consider it again.
Looks like you sold in a good time. Financials doesn’t look good…
Nuno recently posted…Corticeira Amorim – buy
Yeah, I’m glad I’m out. Not impressive at all …
I think its wise that you found a stock you didn’t really have a reason for buying and you got rid of it. Very important to have a plan (which you linked) to give guidance and clarity.
Definitely. I bought the stock before the plan was in place, so hopefully this won’t occur again.
Never heard of the stock, although I took a look at it and I’ve got to agree – financials don’t look so great. Good thing you got out with a profit!
I’ve got one of those “I don’t know why I have this in my portfolio” stocks as well. Just doesn’t seem worth it to sell, though, as it’s only one share and the cap gain I have on it wouldn’t even begin to cover the transaction fee I’d incur selling it, so I just leave it in my portfolio.
Seraph recently posted…Nike Announces Dividend Increase
Yeah, if the gains don’t even cover the transaction costs, there’s no real point in doing anything with it. If that was the case with PZZI, I probably would have just kept it as well. Thanks for stopping by!
Honestly, a pretty comical article. It’s funny how we can be lead astray if we don’t have an investment plan like the one you put together to keep us on track, eh? I love having a guiding light so that when I’m analyzing an investment opportunity (stock market or not), I can simply say, “It doesn’t fit my investment plan” and walk away without being attracted to a long shot.
Glad to see you got out with a small profit and learned a lesson along the way! Frothy markets like this make great opportunities to cull weaker portfolio options if there is such a need.
– Ryan from GRB
GetRichBrothers recently posted…Recent Buy, November 2014
Yeah, it was a perfect storm of stupidity. Wrong place, wrong time, and too much extra cash. Oh well, glad I have my plan in place now!
Hi DD,
Ahah! I like the “I have no idea why I bought…”. It’s funny how we can make important decisions without any kind of logic backing it.
My first stock purchase was PJC.to. I bought it at 18,49$ in november 2013. Now it’s almost worth 28$. I remember that my analysis was pretty thin and I ended up buying at a moment where they decided to sell their shares in Rite Aid. With the money, they said they would buy 23,000,000 of their own share and give a special dividend of 0,50$ per share.
I simply thought… hey 200 shares times 0,50$ is a 100 bucks very fast. And if they buy 1/4 of their outstanding shares, the share price should go up.
I did look at some metrics but I really didn’t know what I was doing.
It turned out that I made a good decision but… it could have turned sour!
It always work better when we have a plan. I’m glad I found documentation about dividend growth investing. It really changed my view about the stock market.
Keep investing my friend
Allan recently posted…November 2014: passive income updates
Wow, sounds like you got lucky too! Glad we both got out of it decently. You’re right, with a plan, a lot of the risk is gone, without sacrificing too much of the upside. Just need the discipline to stick with it!
Thanks for stopping by!